Volume-2 | Chapter-1 | Question 46 to 50 | Issue of Share Capital | Ts grewal solution 2020-21 | Class-12th

Page No 8.117:

Question 46:

A  company issued 10,000 shares of the value of   ` 10 each , payable   ` 3 on application,  ` 3 on allotment and  ` 4 on the first and final call . All amounts are duly received except the call money on 100 shares . These shares are subsequently forfeited by Directors and are resold as fully paid-up for  ` 500 .
Give necessary journal entries for the transactions.



Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

  `

Credit

Amount

  `

 

 

 

 

 

 

Bank A/c

Dr.

 

30,000

 

 

To Share Application A/c

 

 

30,000

 

(Share application money received for 10,000 shares at  ` 3 each)

 

 

 

 

 

 

 

 

 

Share Application A/c

Dr.

 

30,000

 

 

To Share Capital A/c

 

 

30,000

 

(Share application money transferred to Share Capital)

 

 

 

 

 

 

 

 

 

Share Allotment A/c

Dr.

 

30,000

 

 

To Share Capital A/c

 

 

30,000

 

(Allotment due on 10,000 shares at  ` 3 per shares)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

30,000

 

 

To Share Allotment A/c

 

 

30,000

 

(Share allotment money received)

 

 

 

 

 

 

 

 

 

Share First and Final Call A/c

Dr.

 

40,000

 

 

To Share Capital A/c

 

 

40,000

 

(First and final call due on 10,000 shares at  ` 4 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

39,600

 

 

Calls-in-Arrears A/c

Dr.

 

400

 

 

To Share First and Final Call

 

 

40,000

 

(First and final call of  ` 4 per share received on 9,900 shares, and 100 shares failed to pay it)

 

 

 

 

 

 

 

 

 

Share Capital A/c

Dr.

 

1,000

 

 

To Share Forfeiture A/c

 

 

600

 

To Calls-in-Arrears A/c

 

 

400

 

(100 shares of  ` 10 each forfeited for the non-payment of first and final call  ` 4 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

500

 

 

Share Forfeiture A/c

Dr.

 

500

 

 

To Share Capital A/c

 

 

1,000

 

(100 shares of  ` 10 each re-issued for the sum of  ` 500)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

100

 

 

To Capital Reserve A/c

 

 

100

 

(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve Account)

 

 

 

 

 

 

 

 

 

Working Note

Shares forfeited account (Dr.)        

=

600

Less; Share forfeited account (Cr.)

=

(500)

Balance of share forfeited account after re-issue

=

100

capital reserve(Amount to be transferred) = Balance of share forfeited account                  =100



Page No 8.117:

Question 47:

X Ltd. forfeited 900 Equity Shares of  ` 100 each for the non-payment of allotment money of  ` 30 per share and the first call of  ` 20 per share. The second and final call of  ` 25 per share has not been made . The forfeited shares were reissued for  ` 90 per share ,  ` 75 paid-up. Journalise the above.



Answer:

Application

25

Balancing Figure

Allotment

30

 

First Call

20

 

Final Call

25

Un-called

 

100

 

Called-up  ` 75 per share

Books of X Limited

Journal

Date

Particulars

L.F.

Debit Amount

  `

Credit Amount

  `

 

 

 

 

 

 

Equity Share Capital A/c (900×75)

Dr.

 

67,500

 

 

To Share Forfeiture A/c

 

 

22,500

 

To Calls-in-Arrears A/c

 

 

45,000

 

(900 shares of  ` 100 each  ` 75 called-up, forfeited for the non-payment sum of allotment  ` 30 and first call  ` 20 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

81,000

 

 

To Share Capital A/c

 

 

67,500

 

To Securities Premium A/c

 

 

13,500

 

(900 shares of  ` 100 each re-issued as  ` 75 paid-up for  ` 90 each)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

22,500

 

 

To Capital Reserve A/c

 

 

22,500

 

(Balance of Share Forfeiture Account after re-issue, transferred to Capital Reserve Account)

 

 

 

 

 

 

 

 

 

Working Notes-

 

Share forfeiture account credit

=

Share application money received for 900shares

 

=

900×25  `.

 

=

22,500

Calculation of capital reserve

 

 

 

Share forfeiture account credit

=

22,500

Share forfeiture account debit

=

Nil

Capital reserve

=

22,500



Page No 8.118:

Question 48:

The Directors of M Ltd  resolved on 1st May, 2015 that 2,000 Equity Shares of  ` 10 each ,  ` 7.50 paid be  forfeited for non-payment of final call of  ` 2.50 . On 10th June, 2015, 1,800 of these shares were reissued for  ` 6 per share . Give necessary Journal entries.



Answer:

Books of M Limited

Journal

Date

Particulars

L.F.

Debit

Amount

  `

Credit Amount

  `

2012

 

 

 

 

May 01

Equity Share Capital A/c

Dr.

 

20,000

 

 

To Share Forfeiture A/c

 

 

15,000

 

To Call-in-Arrears A/c

 

 

5,000

 

(2,000 shares of  ` 10 each forfeited for non-payment of final call  ` 2.5 per share)

 

 

 

 

 

 

 

 

June 10

Bank A/c

Dr.

 

10,800

 

 

Share Forfeiture A/c

Dr.

 

7,200

 

 

To Share Capital A/c

 

 

18,000

 

(1,800 shares of  ` 10 each re-issued at  ` 6 per share fully paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

6,300

 

 

To Capital Reserve A/c

 

 

6,300

 

(Balance in Shares Forfeiture Account of 1,800  re-issue, transferred to Capital Reserve Account)

 

 

 

 

 

 

 

 

Working Notes:

Share Forfeiture

7.5

Cr.

Share Forfeiture

4

Dr.

Balance in Share Forfeiture Account after re-issue

3.5

Cr. per share

Capital Reserve = No. of Shares reissued × Balance in Share Forfeiture Account after reissue (per share)

= 1,800 ×  ` 3.5 (per share)

=  ` 6,300



Page No 8.118:

Question 49:

Journal

Date

Particulars

L.F.

Debit

Amount

  `

Credit Amount

  `

2014

 

 

 

 

May 01

Share Capital A/c

Dr.

 

3,000

 

 

To Share Forfeiture A/c

 

 

2,000

 

To share first call A/c

 

 

1,000

 

(200 shares of  ` 15 each forfeited for non-payment of first call  `5 per share)

 

 

 

 

 

 

 

 

May 01

Bank A/c

Dr.

 

2,000

 

 

Share Forfeiture A/c

Dr.

 

1,000

 

 

To Share Capital A/c

 

 

3,000

 

(500 shares of  ` 10 each re-issued at  ` 15 per share fully paid-up)

 

 

 

 

 

 

 

 

May 11

Share Forfeiture A/c

Dr.

 

1,000

 

 

To Capital Reserve A/c

 

 

1,000

 

(Balance in Shares Forfeiture Account of 200 shares re-issue, transferred to Capital Reserve Account)

 

 

 

 

 

 

 

 

 

Working note;

Distribution of amount and no. of installment

Application and allotment etc.

 

=

 

10

 

First Call

=

5

200 shares

Second and final call

=

5

 

Total

=

20

 

No. of shares forfeited and re-issued=200

 

 

 

 



Page No 8.118:

Question 50:

Super Star Ltd. makes an issue of 10,000 Equity Shares of  ` 100 each, payable as:
 

 On application and allotment

  ` 50 per share,

 On first call

  ` 25 per share,

 On second and final call

  ` 25 per share.


Members holding 400 shares did not pay the second and final call and the shares are duly forfeited, 200 of which are reissued as fully paid-up @
` 50 per share. Pass journal entries in the books of the company.



Answer:

Book of Super Star Limited

Journal

Date

Particulars

L.F.

Debit

Amount

 `

Credit

 Amount

 `

 

 

 

 

 

 

Bank A/c

Dr.

 

5,00,000

 

 

To Equity Share Application and Allotment A/c

 

 

5,00,000

 

(Share Application and Allotment money received for 10,000 shares at  ` 50 each)

 

 

 

 

 

 

 

 

 

Equity Share Application and Allotment A/c

Dr.

 

5,00,000

 

 

To Equity Share Capital A/c

 

 

5,00,000

 

(Share Application and Allotment money transferred to Equity Share Capital Account)

 

 

 

 

 

 

 

 

 

Equity Share First Call A/c

Dr.

 

2,50,000

 

 

To Equity Share Capital A/c

 

 

2,50,000

 

(Share First Call due on 10,000 shares of  ` 25 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,50,000

 

 

To Equity Share First-Call A/c

 

 

2,50,000

 

(First Call money received)

 

 

 

 

 

 

 

 

 

Equity Share Final Call A/c

Dr.

 

2,50,000

 

 

To Equity Share Capital A/c

 

 

2,50,000

 

(Equity Share Final Call due on 10,000 shares of  ` 25 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,40,000

 

 

Calls-in-Arrears A/c

Dr.

 

10,000

 

 

To Equity Share Final Call A/c

 

 

2,50,000

 

(Share Final Call of  ` 25 per share received on 9,600 shares and holders of 400 shares failed to pay it)

 

 

 

 

 

 

 

 

 

Equity Share Capital A/c

Dr.

 

40,000

 

 

To Share Forfeiture A/c

 

 

30,000

 

To Calls-In-Arrears A/c

 

 

10,000

 

(400 shares of  ` 100 each forfeited for the non-payment final call  ` 25 per share)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

10,000

 

 

Share Forfeiture A/c

Dr.

 

10,000

 

 

To Equity Share Capital A/c

 

 

20,000

 

(200 shares of  ` 100 each re-issued at  ` 50 per share fully paid-up)

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

5,000

 

 

To Capital Reserve A/c

 

 

5,000

 

(Balance in Share Forfeiture of 200 shares of after re-issue, transferred to Capital Reserve)

 

 

 

 

 

 

 

 

 

Working Note-

Share Forfeiture

 `

75

Cr.

Share Forfeiture

 `

50

Dr.

Balance in Share Forfeiture Account for re-issued shares

 `

25

Cr. per share

Capital Reserve = Balance in Share Forfeiture Account for re-issued shares × Number of Share reissued

=  ` 25 × 200 =  ` 5,000

 


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